In long-run equilibrium, a competitive firm produces the level of output at which:
a. marginal cost is at a minimum.
b. short-run average total cost and long-run average cost are at a minimum.
c. total revenue is at a maximum.
d. diseconomies of scale end.
QUESTION 2If a good has a price elasticity of demand coefficient greater than 1, total revenue can be increased by raising the price.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3In long-run equilibrium, which of the following is not equal to price for a perfectly competitive firm?
a. Short-run average variable cost.
b. Long-run average total cost.
c. Short-run marginal cost.
d. Short-run average total cost.
QUESTION 4A horizontal demand curve is perfectly elastic.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5In long-run equilibrium, the perfectly competitive firm sets its price equal to which of the following?
a. Short-run average total cost.
b. Short-run marginal cost.
c. Long-run average cost.
d. All of these.
QUESTION 6Suppose an economist found that total revenues increase for the bus system when fares were raised, the conclusion is that the price elasticity demand for subway services over the range of fare increase is inelastic.
a. True
b. False
Indicate whether the statement is true or false
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